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Annual Address to the Faculty 2004

Introduction of President Steven B. Sample by Edwin McCann

Annual Address to the Faculty 2004 by Steven B. Sample
University of Southern California
February 2004

When I came before you one year ago to deliver this annual address to the faculty, I focused on our celebration of USC’s Building on Excellence campaign, which had formally concluded just weeks before at the end of December 2002. We were feeling exuberant -and justifiably so. We had raised more money than any other university in history. Indeed, we may have raised more money than any other eleemosynary – that is, alms-begging – institution in history.

At the time of my address last year we were also rejoicing over the signs of USC’s remarkable progress. For instance, during the course of the campaign, USC’s selectivity had skyrocketed. Last year, as well as this year, we received 10 applications for every opening in USC’s freshman class, more than double the number from just 10 years ago. In the 2002-03 academic year, the average GPA of the entering class was 3.96, and the average SAT score was 1335, an increase of nearly 300 points over the preceding decade. That figure, we learned, put USC higher than UC Berkeley in terms of average SAT scores – a fact that, I assure you from personal experience, has generated vociferous disbelief from some Cal alumni.

Every year USC receives an increasing number of applicants and matriculants from prestigious prep schools. We are now recruiting very heavily and very successfully from the finest of our local prep schools – including Harvard Westlake, Polytechnic School in Pasadena, and Loyola High School – schools from which we wouldn’t have gotten a single student applicant only a decade ago.

Our dramatic increase in selectivity at the undergraduate level, and our emergence as one of America’s top 10 private research universities, are indicators of the remarkable transformation that has occurred at USC. However, even as we celebrated our accomplishments during my address to the faculty last year, we remained mindful of USC’s future. In my speech there was embedded a challenge. Yes, we deserved to pat ourselves on the back for our achievements. But I declared at the conclusion of that speech that this was decidedly not the time for us to slow up or take a breather. Rather, I urged us to keep pressing upward toward increasingly lofty goals, by firing up the furnaces of ambition to a white heat and taking advantage of the extraordinary and exciting opportunities before us. Thus our celebration of the completion of the Building on Excellence campaign did not mark the close of our efforts to make USC a better university; rather, it signaled a new beginning. It has been in that spirit that so many of us have worked very hard over the last year, and I wish to commend especially our faculty in that regard.

My speech today is devoted to the future. I will focus my remarks on four topics.


The term “ethics” has significant implications for the whole gamut of activities here at USC, from using human subjects for research, to conflicts of interest on the part of individual faculty members and perhaps even on the part of the institution as a whole.

All of us know simply from reading the newspapers that there have recently been huge ethical lapses in corporate and political America, with dire consequences for the offending companies and individuals. But keep in mind that universities are held to an even higher standard than corporations, politicians, and political bodies. Why? Because in some ways we are more important to society. Moreover, universities last longer than other institutions. Then too, people love their alma mater in a way they could never love a profit-seeking corporation. And finally, we in higher education are held to a higher ethical standard because universities are eleemosynary (that is, alms-begging) institutions; people voluntarily give us their money, trusting that we will be good stewards of that which is entrusted to us.

All of this loftiness notwithstanding, universities have recently been responsible for some severe lapses in ethics. Patients have died because of unethical practices at universities. The mission and credibility of some universities have been compromised because of financial shenanigans – breaches that are perhaps not as creative or as dramatic as those amongst brokers, but financial shenanigans nonetheless. The research universities of America have received some brutal press coverage because of these ethical lapses ? excoriations which, I must say, we have deserved.

I recently chaired two task forces put together by the AAU – the Association of American Universities – one focusing on the protection of human subjects in research, and the other examining the question of conflicts of interest. In our final reports, we made some very tough recommendations concerning ethical and unethical practices in research universities, and these recommendations have been, on the whole, very positively received.

Currently I’m drafting a statement of ethics for the University of Southern California at the request of the Board of Trustees. As with USC’s Role and Mission Statement, which has served the university well since its adoption by the board 11 years ago, I will be the author of record for this ethics statement, but I will not really be its creator. The ideas incorporated into the ethics statement have come from many people in the USC community. Also, like the Role and Mission Statement, the ethics statement will be restricted to just one page in 12-point type.

I should like to read to you from this work in progress – this emerging ethics statement – and offer a brief exegesis of some of the more salient points.

The USC Code of Ethics starts out with the following statement:


At the University of Southern California, ethical behavior is predicated on two main pillars: a commitment to discharging our obligations to others in a fair and honest manner, and a commitment to respecting the rights and dignity of all persons. As faculty, staff, students, and trustees, we each bear responsibility not only for the ethics of our own behavior, but also for building USC’s reputation as an ethical institution.


One of the interesting things to note about this opening paragraph is that the twin pillars to which I refer have to do with other people. How do we treat other people? What responsibility do we have to other people? Herein lies the essence of ethical behavior.

The second paragraph says:


We recognize that the fundamental relationships upon which our university is based are those between individual students and individual professors; thus, such relationships are especially sacred and are not to be prostituted or exploited for base motives or personal gain.


During the course of my 13 years as president of this university, I have talked with thousands of alumni about their experience at USC. In these conversations no one has ever said to me, “You know what I love and remember most keenly about alma mater? The faculty,” that is, the faculty collectively. Rather, an alum will typically say to me, “You know what I really remember? Professor Jones. He taught this particular course, and was just wonderful. He changed my life, and helped me move in a new direction.” Notice the difference. The student or alumnus never credits “the faculty” as a whole with having transformed him. No, it almost always comes down to an individual student being affected by an individual faculty member. And thus we must treat these relationships with special care.

You may have noticed that I used the word prostituted in this paragraph: “such relationships are especially sacred and are not to be prostituted or exploited for base motives or personal gain.” Every one of my colleagues who read earlier drafts of this code of ethics urged me to not use the word “prostituted.” But I deliberately chose that word, with all of its sexual connotations. Why? Because one of the most sensitive areas related to ethics for this university or any university has to do with exploitative sexual relationships between faculty members and students.

Let me read the fourth paragraph from the statement of ethics:


We promptly and openly identify and disclose conflicts of interest on the part of faculty, staff, students, trustees, and the institution as a whole, and we take appropriate steps either to eliminate such conflicts or to insure that they do not compromise the integrity of the individuals involved or that of the university.


The AAU report on conflicts of interest lists three simple rules for dealing with conflicts of interest:


First, always disclose the conflicts.
Second, manage the conflicts.
Third, if the conflicts cannot be managed, kill the project.


Let?s look at the first rule: disclosure. If there is even a hint of a possible conflict of interest, or even a chance that someone might construe a situation as a conflict of interest, the university should immediately disclose the respective interests of all the people involved (e.g., who has a financial interest in the project; or whose promotion depends on the outcome of a particular experiment, etc., etc.).

Second, manage the conflict. In most cases, conflicts of interest can be neutralized through complete disclosure and the imposition of appropriate controls. But if a conflict of interest arising from a particular project cannot be neutralized through the twin agents of transparency (i.e., full disclosure) and the imposition of appropriate controls, the only ethical recourse left is to abandon the project altogether.

It is important to keep in mind that the university as a whole, not simply individuals, might have a conflict of interest. For example, if the university invests in the commercialization of a particular invention, any research with respect to that invention conducted at that university is suspect. But the conflict can be easily neutralized by assigning the supervision of any such research to a truly disinterested third party.

In sum, if one examines the most egregious cases of conflicts of interest involving universities over the last two years, it is clear that failure to fully disclose is far and away the most glaring ethical deficiency.

Let me read the fifth paragraph from the draft of the USC Code of Ethics:


We nurture an environment of mutual respect and tolerance. As members of the USC community, we treat everyone with respect and dignity, even when the values, beliefs, behavior, or background of a person or group is repugnant to us. This last is one of the bedrocks of ethical behavior at USC and the basis of civil discourse within our academic community. Because we are responsible not only for ourselves but also for others, we speak out against hatred and bigotry whenever and wherever we find them.


USC is far ahead of many other research universities in this area. Most members of the Trojan Family are willing to respect the basic rights and dignity of all other people, irrespective of how stupid or immoral they believe the other person’s views to be. This has helped create an academic community which welcomes lively discussion and debate – even sharply divided opinions and occasional anger – but one which always recognizes the underlying rights and dignity of every human being.

Paragraph six is a close cousin of the paragraph which we just examined in detail:


We do not harass, mistreat, belittle, harm, or take unfair advantage of anyone. We do not tolerate plagiarism, lying, deliberate misrepresentation, theft, cheating, invidious discrimination, or ill use of our fellow human beings – whether such persons be peers, patients, superiors, subordinates, students, professors, trustees, parents, alumni, donors, or members of the public.


Both paragraphs emphasize the same theme: no one is required to like the other person, but we must all respect that person’s rights and dignity.

Paragraph eight reveals an interesting aspect of ethics vis à vis the law.


We are careful to distinguish between legal behavior on the one hand and ethical behavior on the other, knowing that, while the two overlap in many areas, they are at bottom quite distinct from each other. While we follow legal requirements, we must never lose sight of ethical considerations.


This is a key point and one which is widely misunderstood, not just in the academic community, but in society as a whole. I was privy to some hearsay the other day that I sincerely hope is not true. It was attributed to a well-known faculty member at USC. This professor is alleged to have said, “Ethics are irrelevant and meaningless in today’s world. If it’s legal, feel free to do it, irrespective of any so-called ethical concerns.” As an individual and as a faculty member I reject that notion out of hand.

In reality there are great differences between legal and ethical behavior. For instance, it’s perfectly legal to urge young adults to take up smoking, or to make promises in a political campaign that you have no intention of keeping, or to cheat on your spouse and have all manner of extramarital relationships, or to take advantage of the weak and vulnerable in your business dealings. All of the foregoing are certainly legal, but I don’t think any of them is ethical.

Conversely, in my judgment it is perfectly ethical to break into a cabin in the woods in the middle of a snow storm in order to save your own life or those of others, or for a black seamstress to refuse to give up her seat in the whites-only section of a bus that has been segregated by law, or to use excessive force in defending yourself against a violent attack by hoodlums. All of those things are illegal, but in my judgment none of them is unethical.

Finally, the last paragraph in the current draft of the statement on ethics reads as follows:


By respecting the rights and dignity of others, and by striving for fairness and honesty in our dealings with others, we create an ethical university of which we can all be proud, and which will serve as a bright beacon for all peoples in our day and in the centuries to come.


That in my judgment describes one of the most noble purposes of a university: to be a bright beacon which lights the way for future generations.

USC and Its Hospitals
Let me talk now about hospitals. Teaching hospitals have become one of the most sensitive and volatile areas of university life these days. The good news is that, with the sale of the Norris Hospital (but not the Norris Comprehensive Cancer Center) to Tenet Corporation, USC does not own a teaching hospital. This gives us, in the long term, a great competitive advantage. I am the envy of my colleague presidents in the AAU whose institutions do own teaching hospitals, and who, as a consequence, struggle with unpredictable and erratic cycles of profits and devastating losses within those hospitals.

Our principal hospital partner is Tenet Healthcare Corporation. To be frank, I am very disappointed in Tenet Healthcare. As with its predecessor company, National Medical Enterprises, it has become embroiled in all manner of lawsuits, government investigations, and bad press. Of course some of that spills over onto USC, which is quite unfortunate. Having said that, however, I need to emphasize that Tenet Healthcare has been a very good partner for USC and our Keck School of Medicine. Tenet is funding a significant expansion of our teaching hospital, USC University Hospital, which will be called the University Hospital Norris Tower. Two floors of this new wing will be devoted to the USC/Norris Cancer Hospital, which Tenet now owns. To its credit Tenet has not reneged on or delayed its financial obligation despite the stress of its legal and fiscal problems.

Our relationship with Childrens Hospital Los Angeles (CHLA) is blossoming, so much so that we and they now refer to CHLA as USC’s third campus. This hospital is doing very well financially, despite having to face the same complex challenges confronting hospitals around the country. We have undertaken many joint-venture projects with CHLA, providing substance to the alliance and capitalizing on our strengths for the common good of both institutions and the wider community.

One of the most exciting of these joint ventures is the Institute for Pediatric Clinical Research – IPCR. As you may know, pharmaceutical companies don’t invest heavily in pediatric drug development and testing because there is little financial incentive for them to do so. The vast majority of children are fairly healthy, and therefore the market and the potential for profit in children’s medicine are quite limited. The purpose of the IPCR is to develop and test drugs that will reduce the suffering of children afflicted by diseases that are peculiar to childhood, most especially childhood cancers. Funded by an anonymous donor, the IPCR is poised to become the world center of excellence in the development and testing of drugs for children.

Our relationships with the County of Los Angeles, and especially with the LAC+USC Hospital, are very complex. This hospital is one of the largest teaching hospitals in the country, and one of our major facilities for teaching medical students and residents from the Keck School of Medicine of USC. A new 600-bed, $1 billion replacement of this hospital is now under construction. It will be state-of-the-art and will serve as the hub of the tertiary and quaternary medical care system for the medically indigent of Los Angeles County. Unfortunately, due to the financial difficulties of the county, we may need to deal with cuts in county support for our clinical work in this hospital.

I’d like to digress for just a moment to say a few words about the Keck School of Medicine of USC. Our medical school has made unprecedented strides in the last 30 years. It has gone from being at best merely a department of county government, to its current stature as a nationally ranked research medical school. The Keck School has received enthusiastic support from the university’s central administration. The medical school is an integral part of the university, and likewise the university integrally contains the Keck School of Medicine. The two are not separate; rather, they are one.

It has been in this context of reciprocal strength that the medical school has progressed from a position of comparative weakness nationally to one of considerable vigor. Credit for this certainly goes to leaders in the administration, particularly Dean Stephen Ryan and his colleagues.

But the real heroes in this transformation are the faculty of the Keck School of Medicine of USC. The faculty have built the private practice plan at this school from nothing to something very respectable. The faculty have built the research mission of this school from essentially nothing to a level that is very respectable today and that will become increasingly competitive nationally. Moreover, the faculty of the Keck School of Medicine have distinguished themselves in reaching out to, and creating joint ventures with, other parts of the university to a degree that I suspect is unprecedented at any other university in the country. It has been a team effort, and one in which we can all take pride.

Capital Construction
We are now involved in the largest building program in our history, adding 1.2 million square feet of new space at a cost of about $600 million. The emphasis in our construction program is on constructing new space for research. The Keck School of Medicine has received the lion’s share of this new construction because that is where the greatest needs and opportunities are. But there is substantial construction on the University Park campus as well, where we are constructing new research space for faculty in the biological and life-related sciences.

Our new financing plan for funding capital construction at USC was created by Senior Vice President Dennis Dougherty, and is being implemented with tremendous success. The old method for funding new construction required a dean to raise almost all of the money for a new building before construction could begin. It sometimes took as much as eight or 10 years to raise the money for a given construction project. Under Senior Vice President Dougherty’s new system, a dean need raise only about half the cost of the building as a kind of security deposit, while the building itself is constructed using low-interest debt capital. Because USC’s long-term debt as a percentage of our net assets is quite low, we can prudently move ahead immediately with the construction of a large array of new buildings. Moreover, once the debt for a particular building has been retired, the “security deposit” becomes available to support endowed chairs or other ongoing programs in that building. Thus, a donor can receive two-for-one credit for his gift – that is, his gift enables the immediate construction of the building and, eventually, the same gift provides programmatic endowment for the faculty and students who use the building.

Part of this construction program includes adding 8,000 beds to our stock of dormitory and other residential opportunities for our students, which will nearly double our on-campus and near-campus residential stock capacity. Having long been a commuter school for all intents and purposes, USC is on its way to becoming a residential university. We hope to reserve nearly 2,000 of these new beds for graduate and professional students.

We are building a new Campus Events Center – the Galen Center – with no debt capital whatsoever. Mike Garrett, our director of intercollegiate athletics, undertook the challenge of raising all the money for this building – some $75 million – in hand as gifts and pledges before construction began. He and his staff have worked hard and achieved great success with respect to this challenge. Until recently the largest gift ever to intercollegiate athletics at USC was $1 million. When our honorary trustee and USC alumna Katherine Loker funded the Loker Track Stadium with a gift in 1998, she raised that bar to $2 million. Then Lou and Helene Galen gave $35 million to USC’s Department of Intercollegiate Athletics as the go-ahead gift for the new campus events center. Mr. Garrett and his staff are to be commended for not only raising all the funding for this facility, but as well for establishing a new level of giving for intercollegiate athletics.

Finally I want to talk about the Los Angeles BioMedical Research Park. As counterintuitive as it may seem, Southern California – not Northern California – is the world’s center for biomedical and biotechnological research. But a closer look at Southern California reveals that the real leadership in biomedical and biotech research is in San Diego and Orange counties and, to a lesser extent, in Ventura and Santa Barbara counties. Los Angeles County, on the other hand, is the hole in the center of the doughnut. This county desperately needs a biomedical research park, and we now have a prime opportunity to join with county government to build such a park on land contiguous to USC’s Health Sciences campus. This research park is intended for use by entrepreneurs not only from USC, but from UCLA and Caltech as well.

The New Strategic Plan
I want to finish my presentation with a sneak preview of the new strategic plan. The chief planning officer of this university is our provost, Lloyd Armstrong Jr. He has put together a Strategic Planning Committee composed of distinguished faculty and deans, and has also convened a number of planning subcommittees and task forces. The draft that I have seen has the overarching virtue of being brief, a virtue which it shares with our 1994 strategic plan. One of the reasons I think the 1994 plan was so effective in guiding our efforts was that it was short – indeed, so short that people actually read it!

The new strategic plan will be submitted to the trustees for approval in 2005, which happens to be USC’s 125th anniversary. The anniversary celebration already has a theme that I think dovetails well with my address to you today and with the provost’s new strategic plan: “Inventing the future, honoring the past.”

Provost Armstrong’s new plan builds on our presence in Los Angeles. This city is now clearly the capital city of the Pacific Rim, and by any measure is the most diverse city in the history of mankind. USC is good for Los Angeles; but make no mistake about it, Los Angeles is good for us, particularly as we move forward in certain research areas. Thirteen years ago, when I arrived from Buffalo to assume the presidency of USC, I was advised by many people to “Do a Pepperdine in ’99 and get the hell out of Los Angeles.” Many people believed that Los Angeles was a dead city with no future. The trustees and I, however, took a different view. USC is committed to this city, we grew up with this city, and we plan to continue to be in the heart of this most dynamic and exciting city for centuries to come.

The new strategic plan identifies three major trends that the provost and the planning committee believe will define the research university of the future. The first of these trends is that all research universities will be under increasingly heavy pressure to focus their work on societal needs. This shift will cause a blurring of the boundaries between basic research and applied research. The subtext running through all this is that interdisciplinary research and teaching will be even more important in the first two decades of the 21st century than they were in the last two decades of the 20th, simply because societal problems cannot be meaningfully addressed by a single discipline which is happily ensconced in its own concrete silo, in isolation from its fellows.

While this kind of isolationism unfortunately characterizes most academic institutions, it is not as intractably entrenched here. USC is far ahead of most of our competitors when it comes to interdisciplinary research and teaching. For example, the Institute for Creative Technologies was established at USC by the Department of the Army because of the university’s strengths in the entertainment industry, computer science, and multimedia communications. We now have two national Engineering Research Centers, funded by the National Science Foundation – one in integrated media systems, which we’ve had for several years, and the newest one in biomimetic systems. Both of these ERCs draw on the expertise of faculty from different departments and disciplines on both of our campuses. It’s extremely rare for a university to have two ERCs at the same time. Moreover, USC is the only university in the entire state of California ever to have two ERCs. This is testament indeed to our faculty’s ability to work effectively across traditional academic boundaries, and positions us well to address society’s most important needs.

The second trend that Provost Armstrong and his committee have identified is globalization. In the future the best research universities will have a global presence. USC has a strong base in international programs on which we can build and expand our global presence, and Los Angeles is the ideal home for a research university that is developing a global presence. We attract more foreign students, and have more foreign alumni, than all but two of our competitors. But we will have to work hard to build a stronger global presence in the decade ahead. Such a presence greatly benefits our domestic students, particularly as they face the daunting task of overcoming the entrenched provincialism of their native land (e.g., “If it wasn’t invented here in the United States, it doesn’t count”).

The third trend that Provost Armstrong’s committee has identified is what it calls “learner-centered education.” This approach to education places more emphasis on the needs and potential of students, and requires a more holistic approach to the curriculum. For example, 50 years ago, when I was approaching the age of an undergraduate student, the baccalaureate degree was considered the terminal degree for nearly all students, even for those at elite universities. The bachelor’s degree marked the end of a student’s formal education, except for those few who went on to post-baccalaureate professional schools. In those days undergraduates were advised to specialize, to choose minors that were closely related to and supportive of their majors.

Today the very nature of undergraduate education has changed. At highly selective universities such as USC, the bachelor’s degree is only a way station for students, almost all of whom will go on to advanced education at the graduate level. Thus, the baccalaureate degree serves a different purpose than it did in the past. This new purpose underlies USC’s emphasis on “breadth with depth,” wherein we encourage our undergraduate students to pursue a minor course of study in a field that is far removed across the intellectual landscape from their major. The new strategic plan will also call for changes in the calendar, in the curriculum, and in student services in order to create educational offerings which truly address each individual student’s needs, abilities, and potential.

In order to elevate USC to a higher position in the academic firmament, we have aggressively and successfully pursued excellence as measured by conventional yardsticks. Now, because of our achievements and our upward momentum, we have an opportunity to help develop new yardsticks by which we and our competitors will be measured. In other words, USC has the opportunity to help define new metrics and set new standards for research universities throughout the world. Exploiting this opportunity will require an almost unimaginable degree of hard work and discipline on all our parts. But the potential rewards associated with this opportunity are equally great. As your president, I say, “Let’s go for it!”